Dismissed

P srinivas reddy v. Axis Bank

DRT9 Dec 2025SA/243/2025

Case brief

AI extract

What is this about?

A Debt Recovery Tribunal dismissed a Securitisation Application filed by tenants challenging a bank's possession measures under the SARFAESI Act. The court held that unregistered lease deeds do not create valid tenancy rights to resist bank action under s. 14 of the Act.

What did the court decide?

Securitisation Application was dismissed, and interlocutory applications pending were closed with no order as to costs.

P srinivas reddy versus Axis Bank — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL-II AT HYDEMBAD

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DATED THIS THE^gTH DAY OF DECEMBER , 2025

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PRESENT: SH, RAI'4ESHWAR KOTHE, B.Com, L.LB.^(Hons.), M.A. PRESIDING OFFICER

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SECURITISATION APPLICATION NO. 243 OF²⁰²⁵

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P. Srinivas Reddy S/o P. Linga Reddy, Age: Major, Occ: Private Teacher

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H. No. 1-7-CH0008 Chaitanya Nagar, Miryalguada, Nalgonda District, Telangana.

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P. Praveen Kumar S/o P. Veera babu, Age: Major, Occ: Engineer H. No. 1-7-CH 0008

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Chaitanya Nagar, M irya^lg uada, Nalgonda District, Telangana.

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P. Ramu, S/o P. Satyanarayana, Age: Major, Occ: Teacher Chaitanya Nagar,^M iryalg uada Na lgonda District, Telangana.

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N. Santosh Kumar S/o N. Thiru^pathiah, Age: Major, Occ: Doctor H. No. 1-7-CH0008 Chaitanya Nagar, Miryalguada, Nalgonda District, Tela nga na.

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... ....Applica nts.

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Versus

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Axis Bank Ltd Rep. by the Authorized officer Office at: Retail Asset Center H. No. 5-2-183/184, 3rd floor lvlodi Square R P road, Raniguni, Secunderabad - 500003, Telanqana

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SA No. 24i/2025

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S. Srinivasulu, S/o S. Janagiah Age: Major, Occ: Business H.No. 1-7-CH0008, Chaitanya Na9ar, Miryalguada, Nalgonda Distrlct, Telangana.

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...... Respondents.

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(Respondent No.2 - Formal party. No claim prayed) Counsel for the Applicants : Mr. Arunn Marripeddi. Counsel for 1"t Respondent Bank : M/s. Lotus Law Associates.

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-:ORDER:-

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Applicants filed the present Securitization Application u/s. \7 ot the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2OO2 to declare the measures of vacate notice dated 18.03.2025 (extended up to 23.06.2025) issued against Application Schedule property in pursuant of Crl.M.P.No.166 of 2025 on the file of the Hon,ble Chief Judicial Magistrate, Nalgonda.

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The facts of the case as averred by the applicants in the SA, in brief, are; they have taken the SA schedule properties on lease from the 2nd respondent land lord by virtue of respective lease agreements dated 01.01.2023 and continuing the same later on mutual oral tenancy for a period of 11 months till now. The premises are used for residential purposes. Whereas the 1st respondent initiated securitisation proceedlngs against the 2nd respondent borrower. Applicants need three months time to accommodate themselves in a place in the same locality. Applicants are against the action of 1't respondent bank in issuing the impugned vacate notice arbitrarily, illegally and in violation of fundamental rights under Articles 14, 21 and 30OA ffi*e

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sA No, 243/2o2s

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of the Constitution of India. The rental deed is much before the issuance of impugned vacate notice. As such applicants' tenancy ls valid even after securitisation measures initiated by the secured creditor. The vacate notice issued by the^Advocate commissioner is bad in law. In fact, 2nd respondent is contesting against the 1't respondent bank vide SA.140 of 2025. Applicants should not suffer for the default of^2"d respondent. Therefore, the action of 1't respondent^{is liable to} be set aside as the^proceedings initiated by it are agalnst the provislons of SARFAESI Act, guldelines of RBI and principles of natural^justice.

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The respondent bank filed reply statement.^The submission^of which, in brief, are; the^{a pplicants-tena} nts, being^neither borrowers nor^guarantors do^{not have anylocus to contest the} actions taken against the borroweT^{under the SARFAESI Act.} The schedule^property was lawfully^{mortgaged by the borrower} respondent No.2, who is challenging the^{securitisation} measures taken against the^{propertyseparatelyvide} SA.L4O/2O25. Respondent^{bank compliedthe provlsionsof the} SARFAESI Act and the^{Rules there under while taking the} securitisation measuTes.^{The validityof securitisationmeasures} will be decided in the said SA^{filed by the borrower.} Respondent issued the^{mandatory noticesu/s 13(2) and 13(4)} before filing the Cr.M.P.166/2025^{for appointment of Advocate} Commissioner for the^{purposeof taking the physical possession} of the^{property.Applicantscannot claim any tenancy rights} basing on the strength of^{unregisteredrental deeds. It is well} settled that tenants^{in possesslonof a property on the strength} of an unregistered^{tenancy cannot resistSARFAESIproceedings} /,.Ylttn -/ ^q ,r7t ''.:'1;U,'

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sA No.243/202s

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as held in Harshad Govadhan sondagar vs. IARC (2014) 6 scc 1. Applicants have not filed even a single document or receipt to prove payment of rents. Appricants have not submitted any registered or unregistered rental agreement for the current period. The oral agreements are not valid and get any right to challenge the Securitisation proceedings. In view of the above facts the present sA is not maintainable, Respondent bank relies on the following judgements in support of its pleadings:-

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a){;;,'!}:",0!,';;ffi

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,,"1't[',o,,''u,,0'?r"ilif,

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decided on il.09.2019;

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b) Hon'ble Supreme Court in Vishal N. Kalsaria v.

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4';:: ;{:y;,ff: 2 :":: f.,il,,,o G ovar dhan sondagar v. Internationar Assets Reconstruction Co. Ltd.- (2014) 6 SCC t;

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d) Hon'ble Kerala High Court in K. K. Bashir v. State Bank of India_2010 (t) BankCLR 293 (Ker);

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e) Hory'ble Delhi High Court in State Bank of Iniia and Others^_ 2010 SCC Online Det 2213

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Learned counsel for the applicants reported no oral arguments. Heard learned counser for the 1't respondent bank. perused the written arguments filed by both parties and the material praced on record.

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Learned counsel for the respondent bank, while reiterating the pleadings in the sA, prayed for dismissal of the sA in the interest of justice.

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Now the points that arise for determination are:_

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Whether the Applicant made out any valid ground for quashing the measures initiated by the respondent company u/s 14 of the

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SA No. 243/2025

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Securilisstion Act against the SA schedule property?

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iil To u,hat reliel?

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Point No.^(i):

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There is no denial that the lease agreements relied upon by the applicants are an unregistered documents. It is well settled as^pr cited^{judgment(supra)} relied on by^{respondentbank that} no tenancy rights can be claimed on the strength of^an unregistered lease document. As^per Section 107 of^the Transfer of Property Act, lease of immovable^propertyfrom year to year, or for term exceeding one year, or reserving a yearly rent, can be made only by a registered instrument. Admittedly, the lease deed^pressed into service^being unregistered, it cannot be looked^into.

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In view of the above discussion, I^{find that the present} Securitisation Application^{is devoid of merits and is liable to be} dismissed.

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Point No.(ii'l:

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In the result, SA fails and^{is hereby dismissed.} 10. Consequently, Interlocutory^{Applicationspending,if any,shall} stand closed. No order^{as to costs.}

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Communicate a^{copy of this order to the partiesconcernedand} upload in the official^web Portal'

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(Dictated to lhe steno, signed and^ptonounced by me in the open^{courlon this the} 9'h day of December,^2025).

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KL,"g lnehdsHwlf*o-n^ty PRESIDING OFFICER

P srinivas reddy v. Axis Bank

Case brief

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P srinivas reddy v. Axis Bank

Case brief

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